black gold

black gold

Chairman's Statement

black gold

Dear Shareholders,

FY2017 was an important year for us, representative of
the foundation which we have laid over recent years
to boost our competitive advantage in the Indonesian
coal mining space. In BlackGold, unity is strength. As
a Group, the core of our success stems from a strong
sense of cohesion across our teams. Our operations are
well rooted in an integrated network of infrastructure
supporting a seamless execution of the coal production
process from our mines to end-customer delivery.

This year, we celebrate and take delight in forging
new partnerships through the signing of a Heads
of Agreement to form a new consortium with
China Huadian Engineering Co., Ltd. (“CHEC”), PT
Pembangkitan Jawa-Bali (“PJB”) and PT PLN Batubara
(“PLN BB”), for the Riau-1 Project to develop a 2 x
300 MW mine-mouth coal-fired power plant in Riau
province (the “Riau-1 Project”). This partnership
between our consortium partners represents an
opportunity for the Group to broaden its asset and
earning bases as well as provides the Group a great
opportunity to invest further into the Indonesian
electrical power generation industry, from where
we anticipate will provide positive and sustainable
financial growth for the future.

Another partnership which we had formed was
with you, the investor community. BlackGold had
successfully completed three share placements in
FY2017. The net proceeds from the share placements
were used to strengthen the working capital position
of the Group as well as business investment purposes,
including developmental expenses relating to the
Riau-1 Project. The Group and its employees have
made a deliberate effort to ensure we have made
the necessary preparations for what is to come in the
year ahead. We thank you, our investors, for your
confidence in us.

Operational Performance

Our employees have delivered another year of
consistent performance in operations. This year, we are
focused on delivering in our commitment to consistent
and timely deliveries. We mark the first successful coal
delivery to PLN Tenayan Power Plant under a longterm
contract with PLN. In the second half of FY2017,
the Group had signed an addendum to the Coal Sales
Contract with PLN, where the selling price of coal sales
would be revised upwards by approximately 10%, and
was applied retrospectively on coal sales from March
2017 onwards.

Another milestone for the year is the completion
of our own jetty at Kuala Cenaku, Riau province,
yet another key infrastructural asset in the Group's
supply chain and network of resources. With the
jetty, it reduces reliance on external vendors for coal
transportation, lowers operating costs and enhances
our coal distribution capabilities which would have a
positive impact on our operational performance in the
long-term.

Acknowledgement

An organisation is only as strong as its people. We
continue to take pride in gathering and developing a
workforce that is full of talent, tenacity and diversity,
each an expert in their respective fields of expertise. A
management team of diverse and talented individuals
brings to the table creativity in our business strategy,
plans and considerations. Our employees have again
delivered consistent positive developments in our
operations this year.

Our Board of Directors has also been critical to our
success thus far and we have benefitted immensely
from their knowledge and guidance. Their
conscientiousness and diligence as board members
along with our key management team and advisors
help ensure the Group's business decisions are
adequately considered and well executed.

Finally, a big thank you to all our shareholders, for
the dedication and unwavering support you have
shown in us throughout the year. As we celebrate
in the achievements which 2017 has brought us, we
remain cognizant of the opportunities and challenges
that lie ahead. The Group stays focused on delivering
sustainable growth and long-term value to all our
stakeholders through optimising productivity and
maximising the value of our coal assets. Having
progressed onto the production phase of our
operations, we will continue ramping up production
levels at our mine and keeping on track for completion
of the Riau-1 Project.